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The 2015 Year-End Report: Navigating the Regulatory Landscape

ENQUIRE TODAY 2015 PORZIO LIFE SCIENCES YEAR-END REPORT WWW.PORZIOLIFESCIENCES.COM NAVIGATING THE REGULATORY LANDSCAPE TO OUR CUSTOMERS Customers and Colleagues: We at Porzio Life Sciences ("PorzioLS") have been a leading resource for the life sciences industry for over 11 years. The 2014 Year­End Report was the first annual PorzioLS accounting of the key events of the prior year. Continuing in this vein, we proudly offer the 2015 Year­End Report: Navigating the Regulatory Landscape. Undoubtedly, 2015 proved to be another exciting and challenging year for the life sciences industry: • The Food and Drug Administration ("FDA") Office of Prescription Drug Promotion issued a total of nine enforcement letters to pharmaceutical companies, including a notable one in response to Kim Kardashian's social media posts regarding the morning sickness drug Diclegis. • Per the federal Drug Supply Chain Security Act Draft Guidance, wholesale distributors and thirdparty logistics providers ("3PLs") were required to submit licensing information to the FDA, while several states introduced or passed legislation and/or adopted regulations to license 3PLs separate from wholesale distributors. • There were several, significant settlements in ongoing government prosecutions, and the introduction of notable lawsuits brought against the FDA. • There was an influx of legislation introduced to amend the scopes of practice of advanced practice registered nurses in various states, including the expansion of prescriptive authority and/or modifications to collaborative practice agreement requirements. • The Centers for Medicare and Medicaid Services published the submitted 2014 Open Payments data, providing insight into the first full year of Sunshine Act reporting. Additionally, Congress introduced legislation to amend the Sunshine Act. Our hope is that this report serves as a useful reference of 2015 key events, and provides meaningful, practical information to you and your company. We thank you for continuing to trust PorzioLS with your regulatory and compliance challenges, and wish you a successful year. Sincerely, The Porzio Life Sciences Team Track and Trace Requirements for Wholesalers, Manufacturers and Repackagers: 2015 Update On November 26, 2014, the U.S. Food and Drug Administration ("FDA") released a draft guidance entitled "DSCSA Standards for the Interoperable Exchange of Product Information for Tracing of Certain Human, Finished, Prescription Drugs: How to Exchange Product Tracing Information." The draft guidance is intended to help trading partners (manufacturers, wholesale distributors, dispensers and repackagers) comply with the track and trace requirements outlined in the Drug Supply Chain Security Act ("DSCSA") "through the extension and/or use of current systems and processes." In response to concerns from trading partners of "unforeseen complications with the exchange of the required information," the FDA issued a Compliance Policy indicating that it "does not intend to take action against trading partners who do not, prior to May 1, 2015, provide or capture the product tracing information required by [the DSCSA]." To date, the FDA has not extended the May 1, 2015 deadline. In October 2015, the FDA published on its website a searchable database of licensing information reported by wholesale distributors and third party logistics providers ("3PLs") in accordance with the DSCSA. As expressed in the DSCSA, 3PLs (beginning November 27, 2014) and wholesale distributors (beginning January 1, 2015) are required to report annually certain information related to the various state licenses held by each entity. The FDA required 3PLs to submit their initial report between November 27, 2014, and March 31, 2015. Wholesale distributors were required to submit their initial report between January 1 and March 31, 2015. The FDA requires wholesale distributors and 3PLs to use its CDER Direct Electronic Submissions Portal to facilitate reporting as required by the DSCSA. Both 3PLs and wholesale distributors are required to submit subsequent reports between January 1 and March 31, annually. In October 2015, the FDA published on its website a searchable database of licensing information reported by wholesale distributors and 3PLs. Wholesaler and 3PL Licenses Reporting 2015 Recap Distribution Licensing & Third-Party Logistics Providers Licensing: State Update According to the DSCSA, states are prohibited from regulating 3PLs as wholesale distributors. As such, many states have introduced legislation and/or proposed amendments to its regulations to conform with the federal requirements. In July 2012, Massachusetts enacted legislation amending Section 3 of Chapter 175H of the Commonwealth's General Laws (“Law”). This section of the Law generally prohibits any person from soliciting, receiving, or offering any remuneration when a payment is or may be made in whole or in part by a health care insurer. Prior to July 2012, this general prohibition prevented the distribution of discounts, rebates, and vouchers in Massachusetts. As amended, this section of the Law exempts from the general prohibition “any discount, rebate, product voucher or other reduction in an individual’s out­ofpocket expenses, including co­payments and deductibles, on: (i) any biological product… or (ii) any prescription drug provided by a pharmaceutical manufacturing company…that is made available to an individual if the discount, rebate, product voucher or other reduction is provided directly or electronically to the individual or through a point of sale or mail­in rebate, or through similar means.” Please note that the amended law prohibits a pharmaceutical manufacturing company from providing "any discount, rebate, product voucher or other reduction in an individual's out­of­pocket expenses, including copayments and deductibles, for any prescription drug that has an AB rated generic drug equivalent as determined by the United States Food and Drug Administration." As originally passed, the added exemption to the general prohibition was scheduled to be repealed on July 1, 2015. In 2015, however, Massachusetts enacted legislation extending the repeal day to July 1, 2017. Massachusetts Alternatives to Sampling The following states have made moves to separately license 3PLs; many of these states previously treated 3PLs as wholesale distributors: Arkansas California Florida Louisiana North Dakota Ohio Oklahoma Tennessee West Virginia Medical Device Excise Tax Among other things, the Patient Protection and Affordable Care Act imposes an excise tax of 2.3% to the sale of any taxable medical device. The term "taxable medical device" includes an "instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including any component, part, or accessory, which is recognized in the official National Formulary, or the United States Pharmacopeia, or any supplement to them, intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, in man or other animals, or intended to affect the structure or any function of the body of man or other animals, and which does not achieve its primary intended purposes through chemical action within or on the body of man or other animals and which is not dependent upon being metabolized for the achievement of its primary intended purposes." On December 18, 2015, President Obama signed legislation that suspends the medical device tax for two years. This suspension does not apply to sales during the period beginning on January 1, 2016, and ending on December 31, 2017.’’ The tax suspension only applies to sales completed after December 31, 2015. The FDA's Office of Prescription Drug Promotion ("OPDP") issued a total of nine (9) enforcement letters to pharmaceutical companies in 2015: two (2) Warning Letters and seven (7) Untitled Letters. The most cited violations were "Minimization, Omission or Misleading Presentation of Risk Information" (identified in 74% of the occurrences), and "Misleading or Unsubstantiated Efficacy Claim(s)" (found in 59% of the letters). The number of Untitled and Warning Letters continued its downward trend. The 9 letters issued in 2015 stood in stark contrast to the 156 letters issued in 1998. OPDP Enforcement Letters Enforcement Actions According to the Warning Letter, the social media post entirely omits all risk information, and indicating at the end of the post that more information is available at www.diclegis.com and www.DiclegisImportantSafetyInfo.com does not make up for the omission. OPDP also finds the social media post to be misleading because it fails to provide material information regarding Diclegis’ full approved indication, including important limitations of use, specifically, that Diclegis has not been studied in women with hyperemesis gravidarum. On August 31st, in response to the August 7th Warning Letter, Kim Kardashian posted updated endorsements of Diclegis on Instagram, Twitter and Facebook that include acknowledgement of the pill’s side effects. The OPDP issued a Warning Letter on August 7, 2015, to Duchesnay, Inc. for its morning sickness drug, Diclegis (doxylamine succinate and pyridoxine hydrochloride), citing a violative social media post by Kim Kardashian. The social media post was also submitted in a complaint to the OPDP Bad Ad Program. OPDP Meets Social Media In contrast to six FDA guidances on drug promotion issued in 2014, the FDA produced only one new guidance on this issue in 2015: Revised Draft Guidance for Industry: Brief Summary and Adequate Directions for Use: Disclosing Risk Information in Consumer­Directed Print Advertisements and Promotional Labeling for Prescription Drugs. The new guidance revises the draft guidance entitled Brief Summary: Disclosing Risk Information in Consumer­Directed Print Advertisements (issued January 2004). According to the OPDP, the draft guidance incorporates results from recent social science research that suggest consumers may get overwhelmed by large amounts of information, or may not understand the technical content. FDA regulations require print advertisements to include a “brief summary” of risk information, and promotional labeling to be disseminated with the full FDA­approved prescribing information. In terms of language and readability, FDA recommends that drugmakers translate warnings in the package insert into a casual tone, using lay language. With respect to content, the guidance suggests that the consumer brief summary include contraindications, boxed warnings, and the most common or serious adverse events, or those that lead to discontinuation of the drug. FDA Guidances Regarding Drug Promotion January 29, 2015: Singulex, Inc. reached a $1.5 million settlement in regards to anti­kickback (referrals) and false claims (fraudulent billing and coding) charges. The Corporate Integrity Agreement ("CIA") requires Singulex to provide training that covers how a specific arrangement may implicate the Anti­Kickback Statute and the Stark Law, and other regulations and guidance. Singulex's policies and procedures must also address the Anti­Kickback Statute and the Stark Law. March 31, 2015: Health Diagnostic Laboratory, Inc. ("HDL") reached a $47 million settlement after allegedly inducing physicians to make referrals to HDL through the payment of illegal remuneration, in addition to fraudulent billing and coding claims. The HDL CIA requires that HDL create procedures to ensure that all future arrangements do not violate the Anti­Kickback Statute and the Stark Law, and provide training that covers how a specific arrangement may implicate the Anti­Kickback Statute and the Stark Law, among other regulations. Government Prosecutions: Major Settlements November 29, 2015: Novartis Pharmaceuticals Corporation agreed to pay $390 million to over 40 states, resolving allegations of providing kickbacks to specialty pharmacies in exchange for recommending the drug Exjade to Medicaid and Medicare patients. August 31, 2015: Genzyme Corporation (now a business unit of Sanofi US) reached a $32.5 million settlement following allegations that the company caused a medical device to become adulterated and misbranded while being held for sale. Under the two year deferred prosecution agreement, Genzyme agreed to: 1) admit to and accept responsibility for the facts underlying the charges; and 2) enhance its compliance program. If Genzyme fulfills its obligations under the agreement, the government will dismiss the charges. Pharmaceutical Companies vs. The FDA Amarin On December 3, 2012, the United States Court of Appeals for the Second Circuit handed down its decision in U.S. v. Caronia, ruling that the government cannot prosecute pharmaceutical manufacturers for speech promoting the lawful, off­label use of an FDA­approved drug. In May 2015, Amarin Pharmaceuticals sued the FDA, claiming that it should be allowed to tell physicians that its cholesterol­lowering drug Vascepa can help lower triglyceride levels in patients whose levels are between 200 and 499 mL/dL of blood and who are already taking statins, even though its approved indication is for an adjunct to diet in patients with triglyceride levels over 500. On August 7, 2015, a New York federal judge ruled that Amarin has a constitutional right to promote Vascepa for an off­label use as long as the communication is truthful and not misleading. Even though Vascepa (icosapent ethyl) lacks FDA approval to treat patients with persistently high triglycerides, the ruling in Amarin Pharma Inc., et al. v. Food and Drug Administration et al. allows Amarin to make statements and disclosures to doctors regarding that population. This decision rejects the government’s view that off­label promotion can be prosecuted even if truthful and non­misleading. In 2014, the FDA issued a warning letter demanding that Pacira Pharmaceuticals immediately cease sharing information about using Exparel following surgeries other than bunion or hemorrhoid. At the agency’s direction, the company issued a statement correcting the earlier claims and agreed to stop distributing those promotional materials. On September 10, 2015, Pacira sued the FDA, claiming a First Amendment right to promote its Exparel postsurgical non­opioid analgesic for a wide range of surgeries, citing the Amarin federal court ruling that truthful off­label claims are protected free speech. In Pacira Pharmaceuticals Inc., et al. v. Food and Drug Administration et al., the company maintains that its promotional information is truthful and should be allowed under the recent Amarin ruling. On October 20, 2015, in an unprecedented move, the FDA removed Pacira's Warning Letter from the FDA website. On December 15, 2015, the FDA formally withdrew the September 2014 warning letter regarding Exparel as part of a settlement reached by both parties. The FDA also agreed to allow Pacira to market Exparel as a pain treatment beyond the two surgeries originally cited, and both parties agreed to revise the labeling to clarify the expanded approved scope. To date, FDA has not commented on the reasoning behind the letter’s removal because it is a matter related to pending litigation. Pacira International Transparency For the past several years, PorzioLS has published an annual White Paper analyzing the evolution of the global transparency movement. A primary catalyst for the rapid acceleration of the international transparency movement was the adoption of the European Federation of Pharmaceutical Industries and Associations ("EFPIA") Code on Disclosure of Transfers of Value from Pharmaceutical Companies to Healthcare Professionals and Healthcare Organisations ("Disclosure Code"). EFPIA represents the pharmaceutical industry in Europe and is comprised of thirty­three national member associations and forty corporate members. The expansion of ex­US transparency requirements goes well beyond EFPIA, however, as there have been legislative reporting developments recently in France, Denmark, Portugal, Romania, Greece, England, and Scotland. Geographically, the global transparency movement extends to the Pacific Rim, as the Japanese and Australian pharmaceutical industry groups modified their individual­level reporting requirements in 2015. There were also many developments over the past year in the United States, the birthplace of the transparency movement. Transparency of healthcare professional ("HCP") and healthcare organization ("HCO") interactions are affecting not only innovative pharmaceutical companies but other parts of the life sciences industry as well. To read the full White Paper, click here. Ready Or Not: Make Way for the Global Transparency Movement 2015: Key Ex-US Events May • EFPIA celebrated International Clinical Trials Day on May 20, 2015. • EFPIA and the China Pharmaceutical Industry Association ("CPIA") released a joint press release announcing a joint organization. panies, "SFEE," (Greek pharmaceutical industry group) and Pharma.be (Belgian pharmaceutical industry group) both revised transfer of value reporting templates. June • Hellenic Association of Pharmaceutical Companies, "SFEE," (Greek pharmaceutical industry group) and Pharma.be (Belgian pharmaceutical industry group) both revised transfer of value reporting templates. • IPHA launched a Disclosure of Transfers of Value section of its website. • Farmindustria adopted revisions to the Code of Professional Conduct. • The Croatian Association Innovative Pharmaceutical Initiative adopted revisions to its Code of Conduct of Innovative Pharmaceutical Companies. • The Japan Pharmaceutical Manufacturers Association, "JPMA," (Japanese pharmaceutical industry group) announced that beginning with 2016 spend to be reported in 2017, transfers of value relating to research and development spend will have to be disclosed at the individual recipient level. March • LIF (the Swedish Association of the Pharmaceutical Industry) revised its Ethical Rules for the Pharmaceutical Industry in Sweden, which took effect on March 1, 2015. • EFPIA and the Association of Pharmaceutical Researchers and Developers ("APRaD") (Ukrainian pharmaceutical industry group) signed a letter of intent to advance healthcare reform in Ukraine. • The Pharmaceutical Research Based Industry Malta Association ("PRIMA") (Maltese pharmaceutical industry group) released its disclosure provisions. April • The Australian Competition and Consumer Commission issued its final determination on the application submitted by Medicines Australia, and granted conditional authorization to Medicine Australia's Code of Conduct. • EIG (Slovenian pharmaceutical industry group) amended its Code on Disclosure of Transfers of Value from Pharmaceutical Companies to Healthcare Professionals and Healthcare Organisations. January • EFPIA published the final version of its FAQs for its Code on Disclosure of Transfers of Value from Pharmaceutical Companies to Healthcare Professionals and Healthcare Organisations. • The Irish Pharmaceutical Healthcare Association ("IPHA") released its updated Code of Marketing Practice for the Pharmaceutical Industry. • IPHA also adopted a revised template for transfer of value reporting. • Farmindustria (Italian pharmaceutical industry group) adopted amendments to its Code of Professional Conduct. February • The Association of ResearchBased Pharmaceutical Companies ("AiFD"), the Turkish pharmaceutical industry group, published an English version of its Code of Good Promotional Practice and Good Communication. • The French Supreme Court, Conseil d'Etat, issued a decision on a challenge to the French Sunshine Act's implementing regulations. • The European Generic Medicines Association adopted its Code of Conduct on Interactions with the Healthcare Community. September • FSA (German pharmaceutical industry group) approved revisions to the Code of Transparency for Interaction with Healthcare Professionals and Healthcare Organisations. • The European Generic Medicines Association released Enforcement Guidelines outlining how the EGA Code of Conduct will be enforced and how complaints will be handled. • The Belgian Minister of Health announced a "Pact of the Future for the patient with pharmaceutical industry." October • Medicines Australia issued a press release announcing support for transparency. • The European Court of Justice ("ECJ") issued a ruling and declared the Safe Harbor Program invalid (October 6, 2015). • European Union's Article 29 Working Party on the Protection of Individual with regard to the Processing of Personal Data issued a statement about the ECJ's ruling that the Safe Harbor Program was invalid. • The European Justice Commissioner announced that the European Union and the United States have agreed in principle on a new trans­Atlantic data transfer pact. November • EFPIA posted six disclosurerelated articles on its Pharma Views Blog. • The European Commissioner issued a press release on transatlantic data flows, FAQs, and a 16­page paper titled "Communication from the Commission to the European Parliament and the Council on the Transfer of Personal Data from the EU to the United States of America under Directive 95/46/EC following the Judgment by the Court of Justice in Case C­362/14 (Schrems)." • India's Ministry of Chemicals & Fertilizers, Department of Pharmaceuticals, extended the review period for its voluntary Uniform Code of Pharmaceuticals Marketing Practices. • The Association of the British Pharmaceutical Industry ("ABPI") announced further proposals to amend its Code of Practice for the Pharmaceutical Industry. December • EFPIA posted six disclosurerelated articles on its Pharma Views Blog. • MedTech Europe adopted a Code of Ethical Business Practice. • EU negotiators reached a compromise agreement to move forward with general data protection regulation. • ABPI issued a guidance document regarding the expected content of methodology notes. July • Scienceindustries (Swiss pharmaceutical industry group) adopted revisions to its Code of Conduct of the Pharmaceutical Industry. • Pharmig (Austrian pharmaceutical industry group) adopted revisions to its Pharmig Code of Conduct. • Belgium's Medical Device Industry Group adopted EFPIA­like reporting for its members. • AiFD adopted revisions to its Code of Good Promotional Practice and Good Communicationof its Code of Conduct and Explanatory Notes. August • Farmindustria adopted and issued revisions to its Code of Professional Conduct. • iF! (Croatian pharmaceutical group) adopted and issued revisions to its Code of Conduct of Innovative Pharmaceutical Companies. • EFPIA released its 2014 Annual Report. • The Dutch pharmaceutical industry group released a revised version of its Code of Conduct and Explanatory Notes. 2016 Reporting Deadlines Australia Austria Belgium Bulgaria Croatia Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Japan Latvia Lithuania Malta Netherlands Norway Poland Portugal Romania Russia Serbia Slovakia Slovenia Spain Sweden Switzerland Turkey Ukraine United Kingdom HCP report: 31/8/2016 & 28/2/2017; Sponsorship report: 31/8/2016 & 28/2/2017 30/6/2016 30/4/2016 30/6/2016 30/6/2016 30/6/2016 30/6/2016 31/1/2016 1/6/2016 30/6/2016 Agreements: within 15 days; Benefits: 1/2/2016 & 1/8/2016 30/6/2016 30/6/2016 30/6/2016 30/6/2016 30/6/2016 Company­specific 30/6/2016 30/6/2016 30/6/2016 19/2/2016 30/6/2016 30/6/2016 Within 30 days of payment 31/3/2016 & 30/6/2016 30/6/2016 30/6/2016 31/1/2016 & 30/6/2016 30/6/2016 30/6/2016 30/6/2016 30/6/2016 30/6/2016 30/6/2016 31/3/2016 Porzio GST Porzio Life Sciences developed Porzio GST to meet our customers' goals of implementing an exUS platform for transparency reporting. This solution facilitates data collection and transparency reporting for Japan, Australia and all European jurisdictions and addresses the challenges surrounding cross­border spend, HCP consent, data privacy, and global language and currency distinctions, to facilitate efficient and accurate reporting. • Language: user interface translated to local user’s language; reports generate in local language • Cross­border: track, aggregate and report spend against HCPs across multiple jurisdictions; technical solutions to data privacy • Profile management to streamline tracking of addresses and interactions • Consent management to track and audit consent, refusal and revocation • Agreement management to track and store HCP and HCO contracts • Store PDFs in conjunction with transactions, profiles and agreements • Compliance Reports that comport to the formats and requirements in almost 40 ex­US jurisdictions • Robust Ad Hoc reporting tool and dashboards • Workflow and task management Key Features For more information about Porzio GST, please call 973­538­1690 or visit www.PorzioLifeSciences.com. Key Changes to Mid-Level Regulations in 2015 Arkansas*: Effective July 22, 2015, the Arkansas Board of Medicine is permitted to authorize advanced practice registered nurses ("APRNs") and PAs to prescribe hydrocodone combination drugs, even if they are in Schedule II. APRNs and PAs may not prescribe any other Schedule II controlled substances. Idaho: Effective July 1, 2015, legislation that created the naturopathic physician licensure law is repealed. Louisiana: Effective July 1, 2015, supervising physicians in Louisiana may delegate prescriptive authority for Schedule II controlled substances to qualified PAs. Previously, PAs were not permitted to prescribe controlled substances in Schedule II. Minnesota: Effective January 1, 2015, all categories of advanced nurse practitioners in Minnesota are permitted to prescribe and administer drugs and therapeutic devices without having a collaborative management agreement with a supervising physician. Previously, only certified nurse midwives could practice and prescribe independently. Colorado: Effective September 1, 2015, the number of collaborative agreement practice hours to obtain full APRN prescriptive authority decreased to 1,000 hours. Previously, APRNs were required to practice in a collaborative agreement with a licensed physician for 1,800 hours in order to obtain full prescriptive authority. Maryland: On May 12, 2015, the Governor of Maryland approved legislation authorizing the Board of Nursing to create the Direct­Entry Midwifery Advisory Committee. The Committee will establish education, licensure, and practice requirements for direct­entry (nonnurse) midwives. Direct­entry midwives in Maryland will not be permitted to prescribe medications. They will be permitted, however, to administer approved medications. Please note that implementing regulations have not yet been promulgated. Alabama*: Effective January 1, 2015, the Alabama Board of Medical Examiners began issuing Limited Purpose Schedule II Permits for physician assistants ("PAs"), certified registered nurse practitioners, and certified nurse midwives. The permit allows these practitioners to prescribe, administer and authorize for administration Schedule II controlled substances "which are generally and customarily used in the specialty practice of the supervising physician with whom the PA is registered or the specialty practice of the collaborating physician with whom the CRNP/CNM has a collaborative agreement." Georgia*: On February 12, 2015, Georgia introduced legislation that would permit supervising physicians to delegate prescriptive authority to PAs for Schedule II controlled substances. As proposed, supervising physicians would be prohibited from delegating to a PA the authority to issue a prescription for any Schedule II controlled substance in excess of a 30­day supply, or to issue a prescription for any Schedule II controlled substance not within the physician's scope of practice. Mid-Level Regulations *Controlled Substances Prescriptive Authority Changes New York: Effective January 1, 2015, nurse practitioners in New York who have practiced under a written collaborative agreement with a licensed physician for at least 3,600 hours may practice and prescribe drugs independently. Pennsylvania*: On May 28, 2015, the Pennsylvania House of Representatives introduced legislation to expand the scope of practice for clinical nurse specialists. This bill would permit qualified clinical nurse specialists to prescribe and dispense nonproprietary drugs, which is “a drug containing any quantity of a controlled substance or any drug which requires a prescription pursuant to an applicable Federal or State law.” This bill is still pending. Rhode Island: On July 9, 2015, the Governor of Rhode Island approved legislation that would allow nonnurse midwives to prescribe certain medications as authorized by the state Director of Health. Please note that implementing regulations have not yet been promulgated. Texas*: In June 2015, the Governor of Texas signed legislation to eliminate the statecontrolled substances registration requirement for persons who manufacture, distribute, prescribe, possess, analyze, or dispense controlled substances in the state of Texas. This legislation will become effective on September 1, 2016. Washington*: The Washington Senate introduced on February 4, 2015, Senate Bill 5815, which would expand the prescriptive authority of naturopathic physicians practicing in the state. Currently, naturopathic physicians may prescribe legend drugs, and codeine and testosterone products that are contained in Schedules III, IV, and V. If passed, SB 5815 would permit naturopathic physicians to prescribe legend drugs, hydrocodone products contained in Schedule II, and controlled substances in Schedules III through V. Missouri*: Effective August 28, 2015, supervising physicians in Missouri are permitted to delegate to APRNs and PAs the authority to prescribe Schedule II hydrocodone drugs. New Jersey*: In October 2014, the U.S. Drug Enforcement Administration reclassified products containing hydrocodone from Schedule III to Schedule II; as a result, optometrists in New Jersey, who are only permitted to prescribe controlled substances from Schedules III, IV, and V, were prohibited from prescribing these products. To remedy this effect, New Jersey enacted legislation on June 26, 2015, that permits optometrists to continue prescribing, administering, and dispensing pharmaceutical agents containing hydrocodone, regardless of the controlled substance schedule. New York*: The New York Department of Health has adopted amendments to its regulations that remove language prohibiting licensed PAs from prescribing Schedule II controlled substances. Effective March 11, 2015, licensed PAs in New York are permitted to prescribe controlled substances in Schedules II, III, IV, and V for patients under the care of their supervising physician. *Controlled Substances Prescriptive Authority Changes The APRN Independence Movement In 2015, we saw an influx of legislation introduced to amend the scopes of practice of APRNs in various states. Many states introduced legislation to expand APRNs' prescriptive authority, and/or modify or eliminate collaborative practice agreement requirements. 2015 showed an uptick in introduced APRNrelated legislation as compared to 2014. Of the 79 bills that were introduced in 2015, 9 were signed and approved. The number of bills introduced in 2015 related to PAs also increased over last year. U.S. Transparency According to the Sunshine Act, applicable manufacturers of covered drugs, devices, biological products, and medical supplies must report annually certain information regarding payments and other transfers of value to physicians and teaching hospitals. An additional provision requires applicable manufacturers and group purchasing organizations ("GPOs") to report all ownership and investment interests held by physicians or members of their families. The Sunshine Act requires that the reported data be made available to the public on an Internet website that is searchable, clear, and understandable. On June 30, 2015, the Centers for Medicare and Medicaid Services ("CMS") published the 2014 Open Payments data submitted and attested to by manufacturers and GPOs. The published data included information about "11.4 million financial transactions attributed to over 600,000 physicians and more than 1,100 teaching hospitals, totaling $6.49 billion." The June 2015 publication also included 2013 resubmitted data that had been rejected by CMS in the first publication cycle. Below are highlights from the published data. These numbers reflect the CMS revised totals as of January 15, 2016. Sunshine Act Statistics Total U.S. Dollar Value: $6.45 Billion General Payments, Disputed/Undisputed, U.S. Dollar Value: $3.56 Million / $2.52 Billion Research Payments, Disputed/Undisputed, U.S. Dollar Value: $14.55 Million / $3.21 Billion Ownership or Investment Interest, Disputed/Undisputed, U.S. Dollar Value: $541,000 / $476 Million Total Records Published: 11.37 Million General Payments, Disputed/Undisputed, Number of Records: 1,735 / 10.78 Million Research Payments, Disputed/Undisputed, Number of Records: 1,031 / 580,000 Ownership or Investment Interest, Disputed/Undisputed, Number of Records: 2 / 4,782 Total Physicians with Payment Records: 607,000 General Payments, U.S. Dollar Value: $1.98 Billion Research Payments and Associated Research Funding, U.S. Dollar Value: $68.47 Million Total Teaching Hospitals with Payment Records: 1,122 General Payments, U.S. Dollar Value: $542 Million Research Payments, U.S. Dollar Value: $704 Million Total Companies Making Payments: 1,442 General Payments, U.S. Dollar Value: $2.52 Billion Research Payments: US Dollar Value: $3.22 Billion Numbers above 10,000 have been rounded. On October 31, 2014, CMS announced that it had published a final rule in the Federal Register, which included amendments to the rules implementing the Sunshine Act. Although effective as of October 31, 2014, these changes apply to data collected during the 2016 program year for reporting in 2017. The final rule included the following revisions: • The final rule deletes the definition of "covered device." CMS notes that this amendment is merely a technical change, as the definition of "covered drug, device, biological, or medical supply" is already provided in the rules. • The final rule requires that applicable manufacturers and applicable GPOs report the "marketed name and therapeutic area or product category of the related covered drugs, devices, biologicals, or medical supplies, unless the payment or other transfer of value is not related to a particular covered or non‐covered drug, device, biological or medical supply." Previously, device and medical supply manufacturers were given the option of reporting either the marketed name or the therapeutic area/product category. To make the rules more consistent, these manufacturers will now have to report a product's marketed name if one exists and is relevant to the transfer of value being disclosed. • The final rule requires applicable manufacturers to report stocks, stock options, or any other ownership interest as distinct categories. In addition to these changes, the final rule also deletes the Continuing Education Exclusion in its entirety. This deletion means that applicable manufacturers will now be required to report compensation provided to physician speakers at continuing education events, unless the payment or other transfer of value is not reportable or otherwise excluded. CMS provided additional information regarding this change: • "Starting in 2016, when an applicable manufacturer provides an indirect payment or other transfer of value to a continuing education organization for a continuing education event to physicians, and knows or finds out the identity of the physician attendees/speakers within the reporting year or by the end of the second quarter of the following reporting year, that payment must be reported to CMS in 2017." • "Starting in 2016, when an applicable manufacturer provides an indirect payment or transfer of value to a continuing education organization for payment to a physician speaker at a continuing education event, regardless of the accreditation status of the organization, the payment must be reported to CMS in 2017." Sunshine Act Changes Affecting 2016 Data On July 10, 2015, the United States House of Representatives passed House Bill 6 ("H.R.6"), also known as the "21st Century Cures Act." Among other things, H.R.6 would amend the Sunshine Act by excluding from the reporting requirement "peer­reviewed journals, journal reprints, journal supplements, medical conference reports, and medical textbooks." Currently, the rules do not exclude these materials from reporting. According to the preamble of the final regulations implementing the Sunshine Act, educational materials (including medical textbooks) provided to covered recipient physicians for their own education, but that do not directly benefit patients, are subject to reporting. CMS notes in the preamble that although these items are important for physicians and may have "downstream benefits" for patients, they are not directly beneficial to patients and are not intended for patient use. Therefore, according to CMS, these items are currently reportable under the Sunshine Act. H.R.6 would also add to the current list of exclusions an indirect payment or transfer of value to a covered recipient who is a physician for "speaking at, or preparing educational materials for, an educational event for physicians or other health care professionals that does not commercially promote a covered drug, device, biological, or medical supply," or "that serves the sole purpose of providing the covered recipient with medical education, such as by providing the covered recipient with the tuition required to attend an educational event or with materials provided to physicians at an educational event." H.R.6 is currently pending consideration by the United States Senate. On October 7, 2015, Senator Charles Grassley, co­author of the Sunshine Act, introduced Senate Bill 2153 ("S. 2153"), also known as the "Provider Patient Sunshine Act." S. 2153 would amend the Sunshine Act to require applicable manufacturers to also report payments made to physician assistants, nurse practitioners, and other advance practice nurses. This requirement would not apply to PAs and APRNs who are employees of the applicable manufacturer that is required to submit information under the Sunshine Act. In a released statement, Senator Grassley noted that "there ought to be a complete record for consumer benefit. The goal of sunshine for payments to doctors is to help the public. It makes sense to apply the sunshine to anyone who prescribes medicine. The goal of this bill is to continue the transparency that brings accountability." Senator Richard Blumenthal, co­sponsor of S. 2153, added that "[r]equiring companies to disclose gifts and payments made to other health care providers ­ not just doctors ­ is absolutely essential. The Provider Patient Sunshine Act will rein in dishonorable behavior by increasing transparency and accountability across the entire healthcare industry. Increased access to information is in the public's best interest, and this legislation will ensure healthcare consumers receive safe, efficient, and cost­effective practices." This amendment would apply to "information required to be submitted under [the Sunshine Act]...each calendar year beginning with 2017." This bill is currently pending in the Senate. 21st Century Cures Act Senator Grassley's Act Pending Legislation to Amend Sunshine Act Trend Alert! On September 10, 2015, the United States Senate introduced Senate Bill 2023 ("S. 2023"), which would create the Prescription Drug Affordability Act of 2015. Among other things, S. 2023 would require manufacturers of approved drugs to submit an annual report on the total amount spent during the previous calendar year on the development, manufacture, and promotion of the drug. Specific reportable costs include the total amount spent on drug research and development, clinical trials, materials and manufacturing, and acquisition costs. In addition to these expenditures, S. 2023 would require manufacturers to report the total amount spent during the previous calendar year on "marketing and advertising for the promotion of the drug to consumers and prescribers." S. 2023 would require manufacturers to submit their reports to the Secretary of Human and Health Services and to Congress. The reports would be made available to the public. Throughout 2015, California, Massachusetts, New York, New Jersey, North Carolina, Oregon, and Pennsylvania introduced similar legislation that would require manufacturers to report the costs of marketing and advertising their drugs to consumers and prescribers. The California and Oregon bills did not pass, and the New Jersey and Pennsylvania bills died upon adjournment. The remaining bills are still pending in their respective state legislatures. Effective July 1, 2014, APRNs who have practiced and prescribed in collaboration with a licensed physician for at least three years are permitted to independently (1) diagnose and treat alterations in health status, and (2) prescribe, dispense, and administer medical, therapeutic and corrective measures and dispense professional samples. Please note that those APRNs who do not qualify to practice independently are required to practice and prescribe, dispense, and administer medication in collaboration with a physician licensed to practice medicine in the state. Connecticut enacted legislation requiring applicable manufacturers that provide payments or other transfers of value to APRNs engaged in independent practice to submit annual reports to the Connecticut Commissioner of Consumer Protection. The first report is due no later than July 1, 2017, and should include payments or other transfers of value provided to APRNs from January 1 – December 31, 2016. To date, the state has not provided regulatory guidance on implementing the law. In addition, the Commissioner of Public Health is required to publish annually on the Department of Public Health's website a list of APRNs who are authorized to engage in independent practice. Applicable manufacturers must refer to this list when determining whether they must report information on payments or other transfers of value made to an APRN. This list has not yet been published. State Legislation Requiring the Reporting of Marketing and Advertising Costs Pending Legislation to Amend Sunshine Act Connecticut Legislation Affecting 2016 Data Collection On December 3, 2015, PorzioLS presented the 10th Annual Porzio Compliance Forum, in conjunction with Porzio, Bromberg & Newman, P.C. and the Center for Health & Pharmaceutical Law & Policy of the Seton Hall Law School. A record number of attendees and esteemed speakers made the 2015 Forum a particularly successful and productive meeting. "Compliance 2.0 – The Next Level" offered guests valuable insight into the next level of compliance from corporate, law firm and law school leaders in the life sciences industry. Program highlights included expectations of European transparency based on lessons learned from the American experience, an analysis of internal versus external investigations, and how to use data analytics to predict future behavior. Join us for the 2016 Porzio Compliance Forum! PORZIO Compliance Forum

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